safearth Solar Power Plant

At the moment, several policy measures have been announced across India for the large-scale deployment of solar rooftop projects. These measures include comprehensive rooftop solar policies and net-metering regulations. Currently, the streamlining of utility interconnection processes has led to rapid deployments in the rooftop solar sector. As per the Ministry of New and Renewable Energy (MNRE), the top 10 states for solar in India, account for nearly 80% of the total installed rooftop solar capacity.


As of December 2019, Gujarat had a capacity of 416.63 MW, the highest installed rooftop solar capacity in the country. They have been followed by Karnataka, Maharashtra, Rajasthan, and Tamil Nadu. The reason why rooftop solar is so attractive in a state like Gujarat is that they offer high internal rates of return and have shorter pay-back periods. Similarly, Andhra Pradesh and Tamil Nadu also have similar policies leading to high rates of return and shorter pay-back periods. Adding to this is the considerable difference between the average grid tariff across Commercial and Industrial (C&I) solar segments and the average rooftop tariff in these states.

To further drive rooftop solar traffic, the government announced the Grid Connected Rooftop Solar PV Programme Phase II in March 2019, as a policy aimed to reach the 40 GW target of rooftop solar by 2022. To encourage DISCOMS to take up more rooftop solar projects, the government will provide them with performance-based initiatives. The government will also provide subsidies for individual residential consumers (up to 10 kW) for installation of rooftop solar on their roofs. 


With the consistently falling prices of rooftop solar in many states due to an increase in the scale of the economy of the segment,  these policy changes will allow consumers to focus their interest on rooftop solar now, more than ever before. Current prices for rooftop solar lie between the range of Rs. 1.38 to Rs. 5.20 per kWh, with Madhya Pradesh’s Urja Vikas Nigam Limited achieving a historically low tariff of Rs. 1.38 per unit for central government buildings in its RESCO II rooftop solar tender.

Recently, the Solar Energy Corporation of India issued a tender to develop 97.5 MW of rooftop solar capacity across the country for both CAPEX and OPEX components. Historically, the CAPEX model was more popular, though the OPEX model is now gaining traction in the C&I segment since consumers do not have to invest a capital or be involved in the operations of the plant. As a result, a large number of C&I consumers have entered the rooftop solar market using the OPEX model.

Estimates realistically suggest, that owing to this growth, rooftop solar will reach 24 GW by 2024. The size of the rooftop solar market is expected to be in the range of Rs. 375 billion to Rs. 1,127 billion. But to reach these estimates, the segment must overcome some critical challenges.


One of these challenges is the ineffective implementation of net-metering regulations in the country. Further, distribution systems are not yet equipped to manage the large-scale penetration of rooftop solar plants. Standardization is also required for power Purchase Agreements (PPA) in the segment, especially if C&I consumers are increasingly using the OPEX model.

Going forward, the government needs to ensure greater clarity on policies, rationalise subsidies, and facilitate coordination between state agencies. The digitization of utility grids is also an important contributing factor that can lessen the strain that rooftop solar plants create on the current utility network. The government should prevent the paralysis of rooftop solar policies and continue net-metering incentives for C&I consumers for the sustained growth of the rooftop solar segment.

Summarized from RenewableWatch

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